1.This appeal is directed against the judgment and order dated
25.5.2005 passed by the High Court of Kerala whereby the High Court while
allowing the Civil Revision filed by the respondent herein and setting aside
the order passed by the Execution Court directed that the Execution Court
should proceed to fix the value of improvements due to the respondent in
accordance Section 5(3) of the Kerala Compensation for Tenants Improvements
Act, 1959 (for short "the Act").

2.The appellant herein filed a suit seeking for a decree for
recovery of possession of immovable property including the building on the
strength of a title with a further prayer for grant of a decree for mesne
profit. The suit was instituted by the appellant in her capacity as the
landlady of the said property in the year 1987. The respondents/judgment
debtors contested the said suit by filing a written statement. In the written
statement filed by the respondents, they claimed value of improvements made by
them which they themselves assessed at Rs. 7 lakhs and for recovery of the
same.

3.By judgment and decree passed on 31.5.1991, the suit filed by the
appellant was decreed granting a decree for recovery of possession of the
plaint schedule property from the respondents and also decreeing the suit for
recovery of mesne profit at the rate of Rs. 1000 per year from the defendant
No.1 /respondent No. 1 from the date of institution of the suit till delivery
of possession. It was also directed in the said suit that respondent No. 1
would be entitled to get value of improvements of Rs. 1,35,000/- from the
plaintiff/appellant herein and that the amount would be first charged on the
plaint schedule property and that the defendant No. 1 would also pay the cost
of the suit to the plaintiff/appellant.

4.The aforesaid decree was challenged by the respondents herein
before the first appellate court which dismissed the said appeal.

5.Feeling aggrieved, the respondent filed an appeal before the High
Court wherein also the value of improvements as fixed by the trial court and
upheld by the first appellate court was challenged.

6.The High Court, however, dismissed the said appeal and thereby
upheld and confirmed the decree passed by the trial court as also confirmed by
the first appellate court. Consequent result is that the claim of the
independent title and also the claim of title by way of adverse possession set
up by the respondents were rejected whereas all the courts including the High
Court confirmed only to the extent that the respondents were entitled to value
of improvements being Rs. 1,30,000/- for the building and Rs. 5,500/- for the
motor pump set and pump house, aggregating to a total of Rs. 1,35,500/- only.

7.The aforesaid valuation was made by the trial court by its
judgment and decree dated 31.5.1991 on the basis of Exts. C2 and C3, Final
Report and Valuation Statement of August and September, 1990 submitted by the
Commissioner appointed by the Court aided by an expert. The said amount also
came to be paid by the appellants herein.

8.After the decree was granted by the trial court under judgment and
order dated 31.5.1991 and since despite the decree and also payment of the
compensation as determined and assessed by the courts including the High Court,
the respondents did not vacate the suit premises, the appellants were compelled
to file an execution case bearing Execution Petition No. 331 of 1999 seeking
for eviction of the respondents from the suit premises. In the said execution
petition, the respondents took up a plea that in terms of the provisions of
Section 5(3) of the Act, the execution court is required to conduct a
supplementary enquiry to determine (i) additional compensation for improvement
made to the building after the date of the decree on the ground that the Act
permits to include amount of compensation for the improvements made even
subsequent to the passing of the decree and (ii) on revaluation of this
building for which compensation had already been adjusted in the decree, the
value of the said building with reference to its conditions.

9.The Executing Court took up the aforesaid plea raised by the
respondents and after consideration of the same and after hearing the counsel
appearing for the parties held that the judgment debtors/ respondents could not
be said to be persons in bonafide occupation of the premises so as to 4 come
within the ambit of "tenant" under Section 2(d) of the Act from the
date of the decree and therefore they would not be entitled to the value of
improvements put up subsequent to the date of decree. The Executing Court also
found as a matter of fact that as on the date of the decree, the building in
the property did not have any first floor and that the first floor had come
into existence after passing of the decree. Consequent to the recording of the
aforesaid finding, the Executing Court held that the respondents/judgment
debtors were not entitled to additional compensation for the improvements
effected after the date of the decree. However, the Executing Court took into
account the condition of the entire ground floor of the building on the basis
of the Commissioner's Report filed in execution proceedings and its own finding
that the entire portion of the ground floor had been completed before the date
of the decree in the suit a factor which had escaped the notice of the earlier
Commissioner and Expert appointed by the Court for that purpose at the trial
stage.

10.The Executing Court thereafter made a revaluation of the entire
ground floor portion of the building and directed that an amount of Rs.
3,12,000/- was to be deposited by the appellants-decree holder over and above
the amount of Rs. 1,35,500/- adjudged in the decree which was already deposited
by the appellant.

11.Needless to point out that the aforesaid assessment of Rs.
3,12,000/- was made without giving any depreciation of the building. Be that as
it may, it transpires from the records that the appellants paid the said amount
also in terms of the order passed by the Executing Court that is to say the
appellants deposited the amount of Rs. 3,12,000/- over and above the amount of
Rs. 1,35,500/-.

12.The respondent still not being satisfied, filed a revision
petition before the High Court of Kerala. In the final order passed in the revision
petition, the High Court held that unless the appellants could establish that
there was an order passed by the High Court restraining the respondent from
claiming further value of improvements, the respondent would be entitled to get
such improvements also and that the same could not be denied. Having held thus
in paragraph 14, the High Court observed as follows:- "14. It is also the
settled position of law that section 5(3) of the Compensation for Tenants
Imrovements Act only empowers the executing court to assess the amount of
compensation for improvements made subsequent to the date up to which
compensation for improvements had been adjudged in the decree and section 5(3)
does not enable the executing court to re-open the adjudication made by the
trial court as held in Kamalamma vs Madhavan pillai (1959 K.L.T. 578). In this
case there are no materials available on record to find whether there was a
final order of injunction prohibiting the petitioner from claiming further
value of improvements. The executing court proceeded on the 6 wrong assumption
that since the trial court passed the decree for recovery of the suit property,
the petitioner is not entitled to claim any value of improvements effected
after the said date. That finding is illegal. So the matter requires
reconsideration. I have no other option but to set aside the impugned order and
remand the case back to the executing court to fix the value of improvements
due to the petitioner in accordance with the provisions contained in section 5(3)
of the Compensation for Tenants Improvements Act."

13.In terms of the aforesaid findings, the civil revision filed by
the respondent was allowed by the High Court. The order passed by the Executing
Court was set aside and matter was remanded back to the Executing Court to fix
the value of improvements in accordance with the provisions of Section 5(3) of
the Act.

14.The appellant being aggrieved by the aforesaid order of remand
passed by the High Court, has filed this appeal in which notice was issued by
this Court and after notice was served this Court granted the leave. The
original records of the case have been received. On the prayer of the parties,
there was a direction by this Court that this appeal be listed for hearing
during summer vacation and consequently it was placed before us for final
hearing during the summer vacation when we heard the learned counsel appearing
for the parties.

15.Before we proceed to discuss the rival contentions raised on
behalf of the respective parties, we would like to make a reference to the
relevant provision of the aforesaid Kerala Compensation for Tenants
Improvements Act, 1959. Section 2(b) of the Act reads as follows: - "2(b)
"improvement" means any work or product of a work which adds to the
value of the holding, is suitable to it and consistent with the purpose for
which the holding is let, mortgaged or occupied, but does not include such
clearances, embankments, levellings, enclosures, temporary wells and
water-channels as are made by the tenant in the ordinary course of cultivation
and without any special expenditure or any other benefit accruing to land from
the ordinary operations of husbandry;"

16.The expression "tenant" is also defined under Section
2(d) of the Act as follows :

"2.
(d) `Tenant'.--`tenant' with its grammatical variations and cognate expressions
includes-- (i) a person who, as lessee, sub-lessee, mortgagee or sub- mortgagee
or in good faith believing himself to be lessee, sub-lessee, mortgagee, or
sub-mortgagee of land, is in possession thereof;

(ii) a
person who with the bona fide intention of attorning and paying a reasonable
rent to the person entitled to cultivate or let wasteland, but without the
permission of such person, brings such land, under cultivation and is in
occupation thereof as cultivator; and (iii) a person who comes into possession
of land belonging to another person and makes improvements thereon in the bona
fide belief that he is entitled to make such improvements."

17.Further, Section 4 of the Act lays down that every tenant shall on
eviction be entitled to compensation for improvements which were 8 made by him
or his predecessor-in-interest or by any person not in occupation at the time
of the eviction who derived title from either of them and for which
compensation had not already been paid; and every tenant to whom compensation
is so due shall, notwithstanding the determination of the tenancy or the
payment or tender of the mortgage money or premium , if any, be entitled to
remain in possession until eviction in execution of a decree or order of court.

18.Section 5 thereof provides that the decree passed in eviction suit
would be conditional on payment of compensation. Sub-Section (3) of Section 5
thereof which is relevant for our purpose is also extracted below:- "5(3)
The amount of compensation for improvements made subsequent to the date up to
which compensation for improvements has been adjudged in the decree and the re-
evaluation of an improvement, for which compensation has been so adjudged, when
and in so far as such re-valuation may be necessary with reference to the
condition of such improvement at the time of eviction as well as any sum of
money accruing due to the plaintiff subsequent to the said date for rent, or
otherwise in respect of the tenancy, shall be determined by order of the court
executing the decree and the decree shall be varied in accordance with such
order."

19.The aforesaid provisions particularly Section 2(d) and Section 5
came to be considered by this Court in the case of Kunjan Nair Sivaraman Nair 9
considered the said decision. In paragraph 23 of the aforesaid judgment this
Court has considered the definition of Section 2(d) and analysed the said
definition of tenant by stating thus:- "23. It is to be noted that the
three clauses of Section 2(d) use different expressions to meet different
situations and class of persons. While clause (i) refers to a person who is a
lessee or sub-lessee, or mortgagee or sub-mortgagee or in "good
faith"

believing
himself to be any one of the above such persons, clause (ii) deals with a
person with "bona fide intention" by doing any one of the things
enumerated is in occupation as cultivator, and clause (iii) deals with a person
who comes into possession of land belonging to another and makes improvement
thereon in the "bona fide belief" that he is entitled to make such
improvements. According to the appellant, both clauses (i) and (iii) are
applicable to him.

Clause
(i) deals with the person who bona fide believes himself to be a lessee in
respect of the land in question. The fact that he asserted a claim for purchase
of jenmam rights, irrespective of the rejection of the claim would go to show
that at any rate he was believing in good faith to be one such person viz.
lessee. Clause (iii) encompasses a person who comes into possession of land
belonging to another person and makes improvements thereon with the bona fide
belief that he is entitled to make such improvements. The appellant was
claiming himself to have been put in possession as the nephew of late Narayanan
Nair, and as a person in such possession -- claims to have made certain
improvements.

Indisputably
he was in possession. Though, in view of the judgments of the courts below his
claim to assert a title in him has been rejected and his possession cannot be a
lawful possession to deny the right of the real owner to recover possession or
assert any adverse claim against the lawful owner to any longer squat on the
property -- his initial induction or entering into possession cannot be said to
be by way of encroachment. Whether such a person could not claim to have
entertained a bona fide belief that he is entitled to make such improvements
has to be factually determined with reference to the point of time as to when
he really made such improvements. If the alleged improvements are found to have
been made after the disputes between parties commenced then 10 only it may not
be in bona fide belief. Improvements made, if any, even thereafter only cannot
fall under clause (iii). The court dealing with the matter is required to
examine the claim and find out whether the prescriptions in the different
clauses individually or cumulatively have any application to the claim of the
appellant for improvements alleged to have been made, if so really made. The
courts below have noted that the appellant made a claim that he was a lessee
and thereafter made the improvements. The courts below do not appear to have
considered the issues arising at any rate in respect of the claim for the alleged
improvements said to have been made, from the aforesaid angle. As factual
adjudication is necessary as to whether the appellant acted in good faith or
with bona fide belief as envisaged; this has to be decided taking into
consideration the materials placed before the court in that regard. It is,
therefore, appropriate that the trial court should consider this aspect afresh
uninfluenced by any observation made by it earlier or by the appellate courts.
We also do not express any conclusive opinion on the merit of the claim except
indicating the parameters relevant for such consideration. For that limited
purpose, the matter is remitted to the trial court which shall make an
endeavour to adjudicate the matter within six months from the date of judgment,
after allowing the parties to place material in support of their respective
stands."

20.In view of the aforesaid settled legal position, we are required
to consider whether the respondent could make a claim for enhanced compensation
for improvements allegedly made by him.

21.Initially, when the suit was filed, even at that stage the relief
sought for in the suit was for a decree of recovery of possession as also for
payment of mesne profit. In the said suit itself, the respondent pleaded in the
written statement that he has made improvements in the suit premises and
therefore, he is entitled to claim value of improvements made by him which they
11 themselves assessed and determined at Rs. 7 lakhs and prayed for recovery of
the same. The suit was decreed both for decree of recovery of possession and
also for payment of mesne profit. The trial court held that the respondent
would be entitled to Rs. 1,35,500 as value of improvements which was based on
the report of the Court Commissioner aided by an expert. All the aforesaid
findings recorded by the trial court were under challenge both before the first
appellate court as also before the High Court.

Both the
courts not only upheld and confirmed the decree but also held that the
appellants are entitled to a decree of eviction whereas the respondents would
be entitled to compensation for improvements made at Rs. 1,35,500/-.

22.We are also conscious of the fact that an affidavit was filed by
the respondents herein before the Kerala High Court on 12th July, 1999 wherein
they had given an outline of the eviction proceedings initiated against them by
the appellant herein. They had stated that the second appeal arises from a
decree and judgment in OS No. 294 of 1987 of the Sub Court, Irinjalakuda.

It was
also mentioned therein that the suit was for declaration, title and recovery of
possession. In the Second Appeal the appellant filed CMP 1133 of 1999 seeking
order of injunction to restrain the respondents herein from undertaking any
construction activity in the plaint schedule property and committing any waste
therein and that the said CMP was filed on the 12 allegation that the
respondents herein were attempting to construct a first floor to the existing
residential building situate in the plaint schedule property. In the said
application, it was also alleged that the said construction work was done in
order to delay the benefit of decree that might be passed in the appeal and
that the existing residential building was constructed by the ancestors of the
appellant (respondents herein). It was stated that the said allegations are
incorrect. Despite the said statement, the High Court passed an interim order
of injunction restraining the respondents particularly respondent No. 1 from
making any further construction in the property. After stating thus, the
respondents through respondent No. 1 gave an undertaking in the said affidavit
particularly in paragraph Nos. 3 and 4 in the following manner:- "3. We
are not constructing first floor to the existing residential building. A small
room with an attached toilet was constructed more than two to three weeks prior
to the date of passing of the order of injunction. As regards the said room,
the flooring painting and plastering of the ceiling is yet to be completed.
Once we are informed of the passing of the order of the injunction we had
stopped further works including the one stated above. I think it proper to seek
the permission of this Hon'ble Court to complete the said work.

Accordingly,
the accompanying CMP is filed seeking permission to complete the flooring,
painting and plastering works of the said small room and toilet already
constructed on the first floor of the existing residential building.

4. We
undertake that we will not claim the value of the said room and toilet constructed
on the first floor of the 13 building Neither we will claim any special
equities on account of the construction of the said room and toilet. We may be
permitted to complete the said works at our risk and costs."

23.It is also pointed out that now the respondents are seeking for
payment of compensation for the aforesaid improvements also made despite an
undertaking given by them before the High Court that they would not claim any
value of the said room and the improvements made in the first floor of the
building. Since the aforesaid undertaking was placed on record by the
respondents, any constructions made after the aforesaid undertaking given by
the respondents cannot be said to be improvements made in the bonafide belief
that they are entitled to make some improvements.

24.Even assuming for the purpose of argument that the respondents
could make some improvements even after passing of the decree by the trial
court, but they could not have made any improvement in the suit property by way
of constructing the first floor and also claimed compensation for it when they
had given a clear undertaking that they would not claim any compensation
towards value of the said constructions made on the first floor of the
building. They also undertook that they would not claim anything on account of
the construction of the room and the toilet in the first floor. They are bound
by the aforesaid undertaking given to this Court and they are not 14 entitled
to resile from the same subsequently and claim any compensation.

When they
filed an undertaking they definitely had the knowledge that they are not
entitled to make any improvement thereon in view of the currency of the order
of injunction and therefore they proceeded to give such an undertaking which
disentitles them to claim any compensation towards any such improvement made.

25.The trial court or the executing court took notice of the said
fact and therefore had assessed compensation with regard to improvements made
in respect of the ground floor only after proper assessment thereof with the
aid and assistance of the Court Commissioner aided by an expert at Rs. 3,12,000/-
over and above Rs. 1,35,500/-.

26.The said findings and conclusions arrived at by the trial court
are found to be valid and justified. The High Court acted without jurisdiction
in interfering with the aforesaid order in the exercise of the jurisdiction
under Section 115 of the Code of Civil Procedure.

27.We do not find any reason to linger on the matter any further by
remanding the matter back to the High Court as we find that the findings
recorded by the executing court are legal and valid. In our considered opinion,
the said findings do not call for any interference and the High Court 15
committed a manifest error of law and also exceeded its jurisdiction by
interfering with the said findings. We, therefore, allow this appeal and set
aside the order passed by the High Court and restore the order of the trial
court. The trial court would now take steps for execution of the decree in
accordance with law.